Just a few hours after the end of a White House trade meeting,Bloomberg has published a revealing sourced story on how the US-Chinese trade talks will end soon. Apparently, President Trump has decided to drop his demands for changes in Chinese industrial policy (such as forced joint ownership of ventures which compromise intellectual property) in return for promises by China to import more US products. Bloomberg reports:

“President Donald Trump is pushing for U.S. negotiators to close a trade deal with China soon, concerned that he needs a big win on the international stage — and the stock market bump that would come with it — in advance of his re-election campaign.

“As trade talks with China advance, Trump has noticed the market gains that followed each sign of progress and expressed concern that the lack an agreement could drag down stocks, according to people familiar with the matter. He watched U.S. and Asian equities rise on his decision to delay an increase in tariffs on Chinese goods scheduled for March 1, one of the people said.

“The world’s two largest economies are moving closer to a final agreement that could end their almost year-long trade war, an outcome that would also provide a boost to his efforts to seek reelection in 2020. A new trade accord that would provide Trump with a much-needed win after the collapse of his summit with North Korean leader Kim Jong Un.

“Trump, who met with his trade team Monday, has expressed interest in hosting Chinese President Xi Jinping for a signing ceremony on a deal as soon as this month. His enthusiasm for a pact could shape crucial decisions such as balancing Chinese pressure to lift tariffs immediately against trade hawks’ arguments to initially maintain duties as leverage to assure good behavior by Beijing.”

The timing of the report–just two hours after the White House meeting ended–suggests that the report is based on leaks by participants in the White House meeting. The report also comes after the US recorded the highest balance of trade deficit ever recorded:

“Overall imports grew 7.5 percent, to a record $3.1 trillion, while overall exports grew 6.3 percent, hitting a record$2.5 trillion, a Commerce Department highlights sheet showed. The resulting overall trade deficit of $621 billion was the highest since 2008. Both the goods trade deficit and the services trade surplus individually set records.”

The trade balance with China increased from $419.2 billion in 2018 from $375.5 billion in 2017. We need to examine whatever deal is reached soon to see if the US has dropped some of its most important demands. We will soon see if Wall Street can be played.

After a Pakistani terrorist group, Jaish-e-Mohammed (JeM), attacked and killed about 40 Indian paramilitary troops, India carried out a counterstrike against a JeM site in Balakot, Pakistan using 12 Mirage 2000 jets carrying 1,000 kg (2,200 lbs) bombs. India claimed that the attack killed about 300 terrorists. But Reuters reporters went to the site and reported that there was little damage.

“In two visits to the Balakot area in Pakistan by Reuters reporters last Tuesday and Thursday, and extensive interviews with people in the surrounding area, there was no evidence found of a destroyed camp or of anyone being killed. [here]

“Villagers said there had been a series of huge explosions but the bombs appeared to have landed among trees.

“On the wooded slopes above Jaba, they pointed to four craters and some splintered pine trees, but noted little other impact from the blasts that jolted them awake about 3 a.m. on Feb. 26.

“’It shook everything,’ said Abdur Rasheed, a van driver who works in the area.

“He said there weren’t any human casualties: ‘No one died. Only some pine trees died, they were cut down. A crow also died.’”

The full Reuters report is quite exhaustive. The satellite images of the site also suggest little damage to the JeM site. If these reports are accurate, they represent a profound embarrassment to the Modi government.